The districts faced the potential loss of half of the additional state aid they were supposed to receive.

The Legislature raised the state sales and use tax rate to 4.5 percent during the 2016 session to pay for the additional aid and provide more relief for local property taxpayers. The rate had been four percent since 1969.

The 2016 law set a process for determining whether school districts met two standards for increasing teacher compensation.

The first step required that the state Department of Education review whether districts met those requirements.

The second step established the state School Finance Accountability Board to review the department's findings and make recommendations.

The final step called for the 18 legislators on the appropriations panel to decide whether to accept the board's recommendations.

Howard said she listened to both days of testimony by school districts that appealed to the accountability board and was "very disappointed" the legislators can't tell the board to go back and make further changes.

"I don't believe that was legislative intent," Howard said. She added, "They (state board members) were trying to guess what we wanted them to do."

Howard called the 0.5 percent margin granted by the board for automatic waivers too strict and said five percent would have been more appropriate because it was the first time school districts were held to the standards.

"Most of these are small school districts. They are trying to be wise with the money they were entrusted with," Howard said.

State education officials initially determined 36 districts missed one or both of the accountability standards.

Two districts — Hoven and Lead-Deadwood — didn't appeal because they don't receive state aid.

Five districts discovered they submitted inaccurate data and subsequently were found by the accountability board to be in compliance. Five districts fell within the 0.5 percent margin and received automatic waivers under the board's rule.

Twenty-four districts missed accountability standards by more than 0.5 percent. Fourteen received full waivers from the board. Ten were granted conditional waivers. Legislators focused on those ten.

Sen. Justin Cronin, R-Gettysburg, questioned the White River and New Underwood penalties. "Declining enrollment seems to be an issue in every one of these," Cronin said. "I know we can't fix anything today, but is that something we should look at?"

Darnall said there are districts with declining enrollments and districts with increasing enrollments. She said the board could consider declining enrollment. "In this case they did," she said about New Underwood.

Their exchange triggered a series of questions and comments by several other legislators.

The primary reason for the lighter penalty in the case of New Underwood, according to Sen. Tidemann, is the district would otherwise have been financially wiped out.

Questions rose about Garretson, Faith and McLaughlin too.

"They were supposed to go off projected numbers but they spent 110 percent of their actual numbers," Howard said about Faith. The board's vote had been 3-2 to recommend the conditional waiver.

Rep. Hugh Bartels, R-Watertown, said McLaughlin originally was off by about $271,000 but the accountability board allowed an offset for the district's hiring of two non-certified teachers. That left district off by about $114,000, Bartels said.

Darnall said the department has 10 days to notify each district what the legislators decided. She said districts facing Feb. 1 deadlines to finish further negotiations would lose 50 percent of their additional aid if they haven't complied by that date.

Tidemann said the appropriations committee was given a specific task and any changes would be up to the full Legislature.

Cronin said he personally failed and the Legislature failed when lawmakers put teeth into the law. "Because we did not say specifically what we wanted," Cronin said. He defended the accountability board's work.

"I do think I failed," Cronin said. He admitted he didn't do enough to lay out legislative intent.

"It's just a lesson for us moving forward, especially for me," Cronin said. He added: "It's not mine, it's ours, and we all need to take responsibility for that."

Sen. Deb Peters, R-Hartford, said her intent was the committee have more flexibility. "That's my largest frustration in this process today," Peters said.

Peters acknowledged that what the board of five accomplished was "phenomenal." Moving forward, she said, legislators need to change the law because 2017 salaries won't be good enough in 2020.

Tidemann agreed. He asked if legislators were active in the rules process. "It happens at the rules setting, and we were not there," Tidemann said.

Sen. John Wiik, R-Big Stone City, said he hoped a wise old legislator was listening who had told him, "The most dangerous words in Pierre are the agency shall promulgate the rules."

Thirteen districts received recommendations of conditional waivers that require them to reopen negotiations with local teachers bargaining units and re-invest additional amounts of money in compensation for the current school year. They face recommended deadlines of Feb. 1, 2018, to complete the renegotiation process.

The accountability board also recommended that Clark be required to show its additional compensation package for teachers was at least $36,866. The legislators accepted that as part of the group of 14 conditional waivers.